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This has reduced the value of
Albemarle & Bond’s stock of jewellery and made pawning trinkets a
less attractive deal for cash-strapped customers. The company attributes £7.4million of its lost profits to the effect of gold’s decline.

The rise of payday lenders has further squeezed the pawnbroker, whose revenues are down from £118million to £107million.

There were around 800 non-standard
lenders on the High Street in 2008, but since the crisis their number
has ballooned to 2,144. With reduced market share, Albemarle & Bond
saw its pledge book – the outstanding loans to customers – contract
£3million to £37million.

In an effort to rein in losses,
Albemarle has closed all but two of its pop-up gold buying stores, and
has curbed online and unsecured lending.

The pawnbroker also began melting
down its less sellable trinkets last month as it came close to reaching a
debt limit of £53.5million.

The 30-year-old business has until February to prop up its books before lenders Lloyds and Barclays assess its debts.

The inspection was deferred by five
months to give Albemarle a chance to restructure and maximise value to
shareholders. An attempt to raise £35million in a rights issue failed in
September when Albemarle could not secure the support of its biggest
shareholder, the American pawnbroker EZCorp.

Since then, all of Albemarle’s six non-executive directors have resigned, some stating reasons of conflict of interest.

They include representatives of EZCorp, fuelling speculation that they could now spearhead a bid for the ailing company.